The Services Shift: Seizing the Ultimate Offshore Opportunity

Introduction

If you’re an active manager in the first decade of the twenty-first century, you already know about the phenomenon of globalization in the manufacturing sector—although perhaps you don’t know the full scope of that phenomenon. But by any measure, it’s enormous. In 2006, the U.S. trade-to-GDP ratio was 28.0 percent, compared with 11.1 percent in 1970 and 20.4 percent in 1990.¹ In 2006, U.S. companies committed $60 billion to new manufacturing foreign direct investment (FDI): a jump of 66 percent over the previous year.²

The reasons behind this phenomenon are well documented, and they are widely—often hotly—discussed. They include the low cost of labor overseas, fewer regulatory restrictions, proximity to emerging markets (facilitating ...